Business Model of Video Apps in China

Received an inquiry about how the Business Model of China Video Apps such as Douyin, Kuaishou, and Xiaohongshu can help Business Owners to make money lately.

First of all, let’s take a look at how those Apps are running their business.

Business Model of China Short Video Apps
Business Model of China Short Video Apps

Major Parts of the Video App Model

There are three major parts of the Video App Model:
Public Traffic, Content Layers & Experiences Creation, and Commercial Cash-in.

1. Public Domain Traffic:

Make use of online traffic tools such as search engines, advertisements to draw public domain traffic. Most importantly, hire or partner with those already famous KOLs and KOCs (Key Opinion Consumer) to create trendy posts, leaving comments, and advertise the platform.

2. Content Layers & Experiences Creation:

Strategically choose the hot topics (Content Layer) and create posts to make sure you group a bunch of same interest fans (Experience Creation). Then follow up with the quality of the contents before flushing the same kinds of info to the groups. It helps to make sure the fans stick to your platform.

Since when did you love texts than pictures and videos?

The generation nowadays prefers short, immediate, and fancy info instead of reading long paragraphs (not for the purpose of digging deep into something). Thus, short texts, pictures, and short videos with nice background music helps a lot of retailers, factories, and corporate to sell their products online.

Do customers still go to certain E-shop buying the pictures?

When it comes to selling products online, customers do not only go to Taobao, T-Mall, or other E-shops to just look at the pictures and click to buy. Oppositely, they tend to believe KOLs who show their lovely faces and telling them how good the products are. They do it by using/showing them in front of the camera. That’s why the live streaming function came along.

It creates an experience of seeing the products and their trusted KOLs. Plus, they interact with the KOLs by leaving messages, comments and the KOLs can respond LIVE to them.

LEARN MORE: How does the China Mobile Internet Perform?

3. Commercial Cash-in:

So in what sense are you allowing the KOLs or sellers to start selling on your platform? It is not hard to get the answer- open the E-shop on their platform. Undoubtedly, this is one of the ways they can cash in commercially. Yet, after the first few months of selling, you may find that you want to have more traffic to your shops. Thus, the platform (App) controls the traffic flows- you can subscribe to different plans to boost up your traffics.

Some platforms, on the other hand, also offer different virtual gifts for the fans to purchase (which usually costs only a few Yuan). So why the KOLs would like those virtual gifts? I’m sure I don’t have to say it.

New Arrangements of the Video Apps

In recent months, these Apps started to authorize selected accounts to post videos which can be up to 10 mins. The reasons are:
1. short videos can only satisfy the time gaps of fans.
2. longer videos can attract advertisements
3. pay-for-knowledge options allow more time to talk about one topic in depth.

Talking about ads on the Apps, you may discover it usually comes up with Games. Meanwhile, games in China now offer unbelievable “red pockets” that can be cash-in by the players. It created huge competition among different game developers. Let’s go back to talk about ads.

Not only ads placement can bring in monetary value, but also bringing in Actors and celebrities. Jay Chou did live streaming on Kuaishou on 26 July 2020. It is shocking news to a lot of people including the industry as Jay Chou can attract huge numbers of fans downloading and registering on the App. How often do you uninstall an App? What makes you uninstall? As the App must have contents that suit your interest, it is not that easy to make someone uninstall it somehow. That’s how Kuaishou works to engage more fans and users.

LEARN MORE: 2020 Douyin User Portrait Report: DAU over 400M


This article is not only talking about how these Apps are running their businesses. If you can take a closer look, that is also a summary of how you market your own business, especially in China.

As you already have your company set up and developed (chose your topic), then, you should gather your fans as a community or circle (to feed them with their interest). Finally, for existing clients and to reach more potential clients, you make sure the quality of your products/services with an amazing experience, then you cash in with that or even other possible channels on there.

We are MirrorBell Consulting. Write us an email at or visit our website to understand more. We will assist you to reach your targets in and out of China.

Why other short video / live streaming channels are so attractive?

To put it short, to attract a huge pool of Public Traffic and then transfer those into your Private Traffic is somehow the formula. Yet, content and style are the key elements to make your followers stay. That’s why a lot of people start several accounts at the same time and terminate those which cannot attract followers. Most importantly, please spend enough time understanding the algorithm of the platform you are using.

Which platform is the best to sell in China?

Traditionally, Taobao, Jingdong (JD), and Pinduoduo are centralized platforms for customers to buy. Nowadays, other than these platforms, live streaming KOLs can sell through their live channels. If you are selling products with a low price, no brand, and just for the short term, it doesn’t matter where to sell. However, if you want to build up your brand, selling through KOLs maybe your best option; meanwhile, you should have your product listed on those traditional platforms.

What channels should I consider to do brand building in China?

Zhihu is a knowledge platform that most users are educated and middle class or above. If you are going to build your brand image and market your product, Zhihu can be a good platform to start. Of course, in the end, it depends on what your products are and if you find the right KOLs on Zhihu to collaborate.

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